Scottish Procurement Generates More Than £13 Billion

Public procurement wielded substantial economic influence in Scotland throughout the fiscal year 2021-22, a new report shows. This report marks the fifth annual assessment of procurement activities in Scotland, and revealed that public sector procurement spending surpassed £16 billion, with £8.9 billion directed towards Scottish entities.

In terms of economic activity, the report unveiled that public sector procurement activity generated over £13 billion and contributed £7.5 billion to Scotland’s Gross Domestic Product (GDP). This spending had a notable effect on small and medium-sized enterprises (SMEs) in Scotland, with £4.2 billion flowing to them. 55 pence of every pound spent with suppliers hailed from Scottish businesses, marking a notable increase from the previous year’s 51 pence.

The report also highlighted a significant focus on supporting economically deprived areas, with 48.9% of all public procurement spend, amounting to £4.3 billion, allocated to suppliers in Scotland’s 60% most deprived areas. This figure showed a marginal increase from the preceding year’s £3.9 billion, demonstrating a concerted effort to drive economic growth and equality across the nation.

The report’s insights underscored the multifaceted benefits of responsible procurement practices, with public bodies mandated to prioritise considerations of environmental, economic, and social welfare under the Procurement Reform (Scotland) Act 2014. Local authorities, universities, NHS health boards, and housing associations emerged as key players in driving procurement activities, collectively driving £3.8 billion (or 43.3%) of spend within their respective local areas.

Procurement spend played a vital role in sustaining approximately 130,000 full-time equivalent jobs, underscoring its broader socio-economic significance beyond financial contributions alone.

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